The Two-Way

9:43 am

Sun May 12, 2013

U.S. Gas Prices Expected To Remain Low For Summer

Gas prices are displayed on a board at a Hess station in Hoboken, N.J., Sunday. Lower oil and gasoline prices are giving relief to consumers who recently seemed about to face the highest prices ever.

CX MatiashAP

Drivers will find this summer's gas prices are lower than last year's, the result of a spike in crude oil production. Government forecasters say a gallon of regular gasoline will cost about $3.50 this summer — a slide of more than 10 cents from last year.

Energy Department analysts say "the regular gasoline price will average $3.53 per gallon over the summer," citing lower crude oil prices. "The annual average regular gasoline retail price is projected to decline from $3.63 per gallon in 2012 to $3.50 per gallon in 2013 and to $3.39 per gallon in 2014."

"U.S. refineries are also exporting a record amount of diesel and gasoline to developing countries, including China, where demand for diesel is through the roof," Diane reports.

Oil industry analyst Patrick DeHaan tells Diane that if gas companies "build domestic inventories too much, it will hurt their bottom line. Maintaining exports while not allowing inventories to grow out of control, is what they're likely trying to accomplish."

Last Memorial Day, the U.S. average for a gallon of unleaded was $3.636 — "down about 15 cents" from 2011, CNN reported. But prices rose at the end of the summer, due in large part to Hurricane Isaac.

The International Monetary Fund recently urged governments to cut subsidies and allow higher gasoline prices, seeing it as a way to encompass the costs of increased traffic, pollution and global warming, in addition to exploration, production and transportation.